Bad Credit Refinance Auto Loan Calculator
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Reviewed by Calculator Editorial Team
Refinancing your auto loan can help you lower your monthly payments and reduce interest costs, especially if you have bad credit. Our calculator estimates your potential refinanced loan terms based on your current loan details and market conditions.
How the Calculator Works
This calculator estimates your potential refinanced auto loan terms by considering your current loan balance, interest rate, loan term, and credit score. It uses standard loan amortization formulas to project your monthly payments and total interest paid.
Note: This calculator provides estimates only. Actual refinanced loan terms may vary based on lender requirements, your creditworthiness, and market conditions.
Key Inputs
- Current loan balance (amount you owe)
- Current interest rate (APR)
- Current loan term (remaining months)
- Your credit score (affects available rates)
- Desired loan term (how long you want to refinance)
Calculation Process
- Determine your credit score impact on interest rate
- Calculate monthly payment using the loan amortization formula
- Project total interest paid over the loan term
- Compare with your current loan terms
Example Calculation
Let's say you have a $20,000 auto loan with a 12% APR and 60 months remaining. Your credit score is 620, and you want to refinance to a 48-month term.
| Input | Value |
|---|---|
| Current loan balance | $20,000 |
| Current interest rate | 12% |
| Current loan term | 60 months |
| Credit score | 620 |
| Desired loan term | 48 months |
The calculator would estimate:
- Refinanced interest rate: 14.5% (based on 620 credit score)
- Monthly payment: $425.32
- Total interest paid: $1,207.68
- Savings compared to current loan: $1,200
Formula Used
The calculator uses the standard loan amortization formula to calculate monthly payments:
Monthly Payment = P × (r(1 + r)^n) / ((1 + r)^n - 1)
Where:
- P = Principal loan amount
- r = Monthly interest rate (APR/12)
- n = Number of payments (loan term in months)
The refinanced interest rate is determined based on your credit score using standard lender pricing tables.
Assumptions
- All refinanced loans are assumed to have a 1-month origination fee
- Interest rates are based on average rates for your credit score range
- No prepayment penalties are assumed
- All calculations are based on monthly compounding
Frequently Asked Questions
Can I refinance an auto loan with bad credit?
Yes, you can refinance an auto loan with bad credit, but you'll typically pay higher interest rates. Many specialty lenders offer refinancing options for subprime borrowers.
How long does it take to refinance an auto loan?
Auto loan refinancing typically takes 30-60 days from application to closing, depending on your lender and documentation requirements.
Will refinancing hurt my credit score?
Refinancing can temporarily lower your credit score by 5-10 points as the lender pulls your credit report. However, if you make payments on time, your score will recover.
Should I refinance my auto loan?
Consider refinancing if you can secure a lower interest rate, want to shorten your loan term, or need better payment terms. Calculate your potential savings using our calculator.